LOTOS Group Q3 Consolidated Financial results

Transcription

1 LOTOS Group Q3 Consolidated Financial results 29 October 2014

2 Disclaimer Not for release, publication or distribution, directly or indirectly, in or into the United States of America, Australia, Canada or Japan. This presentation is for promotional purpose only and under no circumstances shall constitute an offer or invitation to make an offer, or form the basis for a decision, to invest in the securities of (the Company ). The prospectus which will be prepared in connection with the offering of the Company s shares (the Shares ) subject to pre-emptive rights (the Prospectus ), upon its approval by the Polish Financial Supervision Authority, will be the sole legally binding document containing information about the Company and the offering of its Shares in Poland. The Prospectus will be made available in an electronic format on the website of the Company ( and, additionally, for information purposes, on the website of Powszechna Kasa Oszczędności Bank Polski S.A. Oddział Dom Maklerski PKO Banku Polskiego w Warszawie ( This presentation does not constitute a recommendation within the meaning of the Regulation of the Polish Minister of Finance Regarding Information Constituting Recommendations Concerning Financial Instruments or Issuers Thereof dated 19 October This presentation (and the information contained herein) does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in the United States, Australia, Canada or Japan, or any other jurisdiction. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act ), and may not be offered or sold in the United States of America, unless registered under the Securities Act or unless an exemption from the registration requirements set forth in the Securities Act applies to them. No public offering of the securities will be made in the United States of America. To the maximum extent permitted under the applicable provisions of law, no representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. The information, opinions and forward-looking statements contained in this presentation are subject to change without notice. The forward-looking statements included in this presentation involve a number of known and unknown risks, uncertainties and other factors that could cause the Company s or its industry s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. The Company does not undertake publicly to update or revise any forward-looking statement that may be made herein, whether as a result of new information, future events or otherwise. The information included in this presentation constituting investment targets or other business outlook information shall be understood as the Company s internal investment targets and shall not be construed as financial projections or forecasts. Although the Company believes that these targets are reasonable, they may or may not prove to be accurate. Neither the Company nor any of its subsidiaries or any other related entities shall be held accountable for any damage resulting from the use of this presentation or a part thereof, or its contents or in any other manner in connection with this presentation. 2

3 Agenda 1 Key highlights External environment Upstream Downstream Consolidated financial results

4 Key highlights 4

5 Key highlights 7.55 bn PLN Revenues 401 m PLN Clean LIFO EBITDA estimation boe/d Upstream production +576 m PLN Operational Cash flow 5

6 External environment 6

7 External environment oil price & product cracks 0,0-0,5-1,0-1,5-2,0-2,5-3,0-3,5-4,0-0,8-1,8-1,5-1, Brent ural spread (left axis) USD -1, ,3 Brent price (right axis) USD -1,5-1,7-2, Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep ,0 110,0 105,0 100,0 95,0 90, Diesel crack USD/bbl 19,5 20,1 20,0 18,0 17,7 9,2 9,3 16,1 6,9 12,9 Gasoline crack USD/bbl 19,5 19,1 16,5 17,6 17,6 16,3 14,4 18,9 Source: Average monthly data, Based on Thomson Reuters data. Product cracks including Brent/Ural spread 0 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 7

8 8,00 Model refining margin vs peers USD/bbl (1) (1) (1) LOTOS PKN OMV ERMI (2) 7,00 6,97 6,00 5,00 6,08 6,00 5,48 5,05 4,97 6,60 4,00 3,28 4,32 4,70 4,07 3,00 2,00 2,48 3,50 2,10 1,44 1,37 2,70 1,92 1,00 1,17 1,16 0,90 1,63 1,48 0,00 2Q Q Q Q Q Q 2014 (1) Source: Company data; based on websites of the companies (2) Source: Total; European Refining Margin Indicator (ERMI) is an indicator intended to represent the margin after variable costs for a hypothetical complex refinery located around Rotterdam in Northern Europe that processes a mix of crude oil and other inputs commonly supplied to this region to produce and market the main refined products at prevailing prices in this region. 8

9 External environment GDP growth & FX development % m m ,3 3,25 3,2 3,15 3,04 0,8 1,9 Polish GDP growth 2,7 3,0 3,2 3,1 Q Q Q Q Q Q USD/PLN Q (2) (1) 3,30 3,1 3,05 3 2,95 2,9 2,85 2,8 1-Jul Jul Jul Aug Aug Sep Sep m m Diesel consumption (Poland) 3,6 3,4 3,4 3,4 3,5 3,0 Q Q Q Q Q Q Gasoline consumption (Poland) 1,3 1,3 1,3 1,3 1,2 1,1 Q Q Q Q Q Q (3) (3) Source: (1) National Statistics Bureau. Q Bloomberg forecast (2) National Bank of Poland (3) POPiHN Organisation for Oil Trade and Industry 9

10 Upstream 10

11 Hydrocarbons reserves and production figures Average daily oil&gas production (boe/d) 2P oil&gas reserves (m boe) , , ,8 40, , (1) (1) 37, Q3 13 Q2 14 Q3 14 Norway Poland Lithuania 13,3 (1) For Norway calculated on effective production days : 31 days in 2Q 2014 and 75 days in 3Q ,6 5,4 Sep 13 eop June 14 eop Sep 14 eop Norway Poland Lithuania Decrease of the 2P reserves (moving YME reserves to 2C) according to the AGR s Competence Person Report, which shall be attached to the Prospectus prepared in connection with the offering of shares in subject to pre-emptive rights Source: Company 11

12 Sales split by products and countries q/q Q sales (total quarterly boe) Q sales (total quarterly boe) Source: Company Norway Poland Lithuania Oil Gas Norway Poland Lithuania Oil Gas 12

13 Upstream segment Clean EBITDA development m PLN -15% EBITDA Q3'13 EBITDA Q2'14 One offs Clean EBITDA Q2' EBITDA Q3'14 One offs Clean EBITDA Q3' Upstream s Clean EBITDA at PLN 106m, down by 15% q/q following lower sales volumes in Poland Decreasing oil prices negatively influencing profitability of the segment Source: Company 13

14 Downstream 14

15 Refinery production - volumes of key products k tons Diesel Gasoline Jet Fuel k tons HSFO Bitumens Q Q Q Q Q Q Q Q Q Q Diesel staying flat q/q and slightly below the volume achieved last year, supported by the increased production of jet fuel Deteriorated structure of heavy products marked by the decrease of bitumens and increase of HSFO in the overall sales structure Source: Company 15

16 Share of key products in the overall refinery throughput 50% 45% 40% 47% 45% 43% 44% 43% 35% 30% 25% 20% 15% 10% 5% 0% 17% 14% 14% 13% 15% 10% 12% 13% 12% 11% 8% 6% 5% 7% 8% 5% 4% 7% 6% 2% Q Q Q Q Q Diesel Gasoline JET HSFO Bitumens Source: Company 16

17 Market share evolution and petrol station network Overall market share (volumes) Retail market share (volume) 33.1% 33.3% 33.7% 33.8% 33.5% Premium Optima Other ,3% 8,4% 8,5% 9,2% 9,1% Q Q Q Q Aug 2014 Dec 2013 eop June 2014 eop Sep 2014 eop Retail market share at 9.1% Number of stations by type Premium LOTOS owned Premium franchised Optima LOTOS owned Optima franchised other 112 Source: Company Sep 2013 eop Sep 2014 eop 17

18 Downstream segment LIFO EBITDA development m PLN +29% EBITDA Q3'13 Clean LIFO effect estimation (1) Clean LIFO EBITDA estimation Q3'13 EBITDA Q2'14 LIFO effect estimation LIFO EBITDA estimation Q2'14 EBITDA Q3'14 LIFO effect estimation LIFO EBITDA estimation Q3'14 LIFO EBITDA q/q up by 29% mainly thanks to the improved macro conditions Clean LIFO effect for the Q excluding the 103m PLN cheap oil included in the LIFO inventory valuation, which artificially improved Q3 LIFO EBIT Source: Company (1) PLN -48m = PLN 55.3m PLN 102.8m (LIFO effect 3Q 2013 effect of cheap oil inventories in the LIFO calculation) (2) POPiHN Organisation for Oil Trade and Industry 18

19 Consolidated financial results 19

20 Changes in segments EBITDA results y/y m PLN Resulting mainly from: Negative effect of the crude oil prices trend development Negative FX trend resulting in effectively higher prices of feedstock throughput Resulting from: Heimdal assets production Q results artificially boosted by the cheap oil inventories lowering the LIFO inventory valuation Resulting from one-offs in Q3 2014: Increase in the provision for YME decommissioning Dry wells write-offs on the Baltic Sea and in Lithuania 336 Source: Company 20

21 Q results breakdown vs Q m PLN 204 Q EBIT LIFO effect estimation One off items Clean LIFO EBIT estimation Depreciation Clean LIFO EBITDA estimation (1) 155 Q Source: Company (1) Effect of the cheap oil inventories lowering the LIFO inventory valuation, and therefore increasing the LIFO effect 21

22 Indebtedness 72% Gearing ratio (1) m PLN Financial debt 70% 68% 66% 64% 62% 60% 62% 67% 70% % Dec 2013 eop Jun 2014 eop Sep 2014 eop Dec 2013 eop Jun 2014 eop Sep 2014 eop Gearing ratio increased due to negative FX differences increasing the USD denominated debt balance and impacting the reserve capital position Financial and net debt figures including loans, borrowings, leasing and bonds m PLN Net debt Dec 2013 eop Jun 2014 eop Sep 2014 eop (1) Gearing ratio = net debt / total shareholders equity Source: Company 22

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